Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
|
Last |
Change |
Percent |
|
|
S&P Futures |
1303.7 |
3.4 |
0.26% |
|
Eurostoxx Index |
2145.2 |
7.5 |
0.35% |
|
Oil (WTI) |
82.29 |
-0.4 |
-0.50% |
|
LIBOR |
0.468 |
0.000 |
0.00% |
|
US Dollar Index (DXY) |
82.53 |
0.013 |
0.02% |
|
10 Year Govt Bond Yield |
1.61% |
0.02% |
|
|
RPX Composite Real Estate Index |
178.9 |
0.2 |
|
Markets are a touch higher this morning after yesterday’s sell-off. Federal Reserve Bank of Chicago President Charles Evans (who Jim Bianco called an uber-dove) said he supports more stimulus. The 10-year yield is back up to 1.61% and MBS are down about 1/4 of a point.
The National Federation of Independent Business Optimism Index ticked down in May. It came in at 94.4, vs 94.5 in the previous month, which is a historically low level. 51% of owners hired or tried to hire in the last three months and nearly 3/4 of those reported few or no qualified applicants for positions. The report has a pretty scathing indictment of Washington, with 22% of the respondents indicating taxes as the single most important problem. 20% reported poor sales, and 19% reported government red tape.
Excerpt from the report: “The Index did not go down by much, that’s the good news. The May reading is still at recession levels from an historical perspective, consistent with very anemic Gross Domestic Product (GDP) and employment growth. The calculus of spending decisions requires an estimate of future sales, tax rates, interest rates and credit availability, labor costs, health care costs, regulatory compliance costs, all of which are very uncertain, meaning that owners cannot make reliable estimates of what will happen to these factors. Most of this uncertainty is coming out of Washington, D.C. Owners can’t attach probabilities to outcomes or even decide which outcomes to consider.
The amount of political manipulation and evasion to guide the spending of billions of taxpayer dollars is disturbing to owners. Sixty (60) percent of those surveyed said now is a bad time to expand their businesses; one-in four of those owners cited political uncertainty as the main reason, second only to concerns about a weak economy. Investing in jobs or plant and equipment will remain at “maintenance” level until this is resolved.”
I would be surprised if this doesn’t become campaign fodder.
A study from the Federal Reserve regarding changes in US family finances has been getting a lot of discussion – the median net worth of families has dropped nearly 40% from 2007 to 2010, putting them back where they were in 1992. Most of this is housing-driven, though stocks, student loans, and a drop in incomes are playing a part too. A generation’s worth of wealth creation has been destroyed in 3 years. Of course much of that wealth was illusory, but it does speak to why confidence has been so lousy – the reverse wealth effect. Hopefully housing is in fact bottoming, which will reverse this effect.
The WSJ addresses in interesting question: if the shadow inventory is so high, why is the inventory of homes actually for sale at normal levels? It turns out (unsurprisingly) that negative equity is the reason, but also the influx of professional investors scooping up inventory in the hardest-hit areas. It also explains why prices are rising the most at the bottom end of the market – they have the most negative equity, so supply is the most constrained.
Chart: NFIB Small Business Optimism Index:
Filed under: Morning Report |
All Things in Moderation 
I find it rather disconcerting that I seem to agree with Bruce Bartlett so often. Sorry to go off topic here but a lot of what he says makes sense to me from the standpoint of someone who is interested in economics but not very well versed. I’ll try to read the latest CBO report which is linked in the NYTimes piece. Doesn’t it really seem like a lot of what he says is true though, even when you take into consideration the bursting of the housing bubble and what all of that has cost us?
Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.
Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.
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lms:
According to a summary of historical federal tax receipts and outlays, using constant dollars, the US collected slightly higher ($12 bn) tax receipts in 2003 (the lowest receipts during Bush’s term) than it collected in 1997. Yet it spent nearly $400 billion more in ’03 than in ’97. In 2009 (the lowest receipts during Obama’s term) the US collected almost exactly the same amount in tax receipts as in 1997, yet spent $1.2 trillion more in ’09 than in 1997.
In 2006, the US collected slightly more in tax receipts than it collected in 2000 (the highest receipts during the Clinton years), yet it spent more than $500 billion more in ’06 than in ’00.
We do not have a tax receipts problem. We have a spending problem.
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“Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.”
Isn’t that like saying how healthy we would be as a nation if we kept the bodies we had when we were 21?
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I’m not sure how hiring more police officers came to be the answer for anything.
Those in the field will tell you that we have plenty of police officers, but the court system makes them logistically useless at times
For instance in DC, there is no night court of any kind, nor night papering of cases. What that means is every arrest by an officer on evening or midnight shift, takes those officers, often the best and most agressive, off their shifts and sends them to day work, or forces them to work on little or no sleep.
It also tremendously incoveniences victims and witnesses and leads to delays and outright dismissals when people don’t show. God forbid however, that you should ever inconvenience a judge by having night sessions!
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“Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.”
Does that mean “assume the equity bubble never burst?” That the capital gains taxes the government reaped in 2000 kept on at the same level?
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Isn’t that like saying how healthy we would be as a nation if we kept the bodies we had when we were 21?
I suppose John, but he goes on to say that obviously, to him and apparently the CBO, that tax cuts and lower than expected growth led to an $11.7 trillion turn around instead. When I look into the future I see more tax cuts and slow growth so I don’t see how that helps the deficit or the middle class going forward. To me that’s a point worth considering when I vote obviously.
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God forbid however, that you should ever inconvenience a judge by having night sessions!
We did it in the 80s: http://www.imdb.com/name/nm0026789/
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lms:
Of yes, the Bush administration did a poor job in many areas, however we have never repudiated the business cycle in spite of premature calls for it’s death many times. The conditions at the end of the Clinton years would have changed regardless. That’s all I was saying
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Brent:
You would need a Markie Post in her prime to get the old guys to work those hours
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banned:
I heard that Markie and Hillary had a tryst at one point…
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Brent, I haven’t read the report but isn’t it the same one they do every year with baseline projections under current policy and the economic situation? I think it goes out ten years right? If they’re comparing the report from ten years ago with the one this year I doubt they would have anticipated the housing bust which I think they said contributed to 27% of the deficit or something along those lines. They called it economic and technical, whatever that is.
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After reading the report I agree it’s pretty tough to project ten years out, considering economic conditions and legislative decisions can change rather dramatically, but I think it does show how some of the policies during the Bush years really exacerbated the increase in the deficit. I keep seeing the chart with the blue and gold lines showing how much of the deficit was attributed to the tax cuts and the wars etc. compared to the stimulus and economic downturn which resulted in government spending as far as unemployment and what not. It confirms the perfect storm scenario, decreased revenue and increased spending over 16 years, with a life changing financial collapse, dramtically added to the deficit…………….who knew?
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OT: Good Op-Ed in the NYT Today:
“How Not to Solve a Crisis
By JOE NOCERA
Published: June 11, 2012
There is a delicious moment in the HBO film “Too Big to Fail” when Christine Lagarde, then France’s minister of finance, calls Hank Paulson, the U.S. Treasury secretary. It’s September 2008, and Lehman Brothers has just imploded after the government refused to bail it out. Panic is in the air.
“Hank,” she scolds him. “How could you let Lehman fail? What on earth were you thinking?” She pleads with him to save A.I.G., which appears to be the next domino poised to fall. “This is not just an American problem,” she concludes. (Note: I served as a consultant on the movie.)
Oh, the irony! Here we are, more than three-and-a-half years later, during which time the euro zone has repeatedly flirted with financial catastrophe. Lagarde now leads the International Monetary Fund, which exists, in large part, to help countries survive such catastrophes. Yet neither she nor anyone else in Europe has been willing or able to do more than use Band-Aids to stanch the bleeding. ”
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“Brent Nyitray, on June 12, 2012 at 9:42 am said:
“Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.”
Does that mean “assume the equity bubble never burst?” That the capital gains taxes the government reaped in 2000 kept on at the same level?”
My impression was that Bartlett’s analysis was based around the idea that the 2000’s economy would do what it did anyway after the equity bubble burst (i.e. the Bush tax cuts and war spending had no stimulative value) and then used a static revenue model for keeping the tax rates at the 2000 level and then assumed that none of the Bush “policy” spending occurred, including Medicare Part D, Iraq and Afghanistan.
Discounting Medicare Part D and Iraq seems reasonable, but I can’t imagine a Gore administration not taking a more aggressive approach to Al Queda after 9/11.
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Scott
I don’t know how to square those tax receipts with the CBO numbers in the chart. It looks like tax revenue was down over $2T to me in the past ten years. Agree though that spending has been a problem since Clinton, we probably won’t agree where the problems lie though.
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lms:
I don’t know how to square those tax receipts with the CBO numbers in the chart.
The chart, I believe, represents CBO’s projections made in 2000, not actual tax receipts. The world turned out to be a much different place, obviously.
It looks like tax revenue was down over $2T to me in the past ten years.
Down from projections made in 2000 using all kinds of in-retrospect-erroneous assumptions. In terms of actual tax receipts from 2000, we are down about $300bn, which is not all that surprising given that unemployment has basically doubled.
Even if we look at spending and receipts as a percent of GDP (which I myself do not think is a particularly useful metric, but it gets used all the time), the spending vs receipts picture is stark. It turns out that current receipts (2011) are about 2.3% behind the yearly average since the end of World War II, 15.4% vs an average of 17.72%. But 2011 spending was 4.3% higher than the average, 24.1% vs an average of 19.79%.
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“ScottC, on June 12, 2012 at 11:51 am said:
Even if we look at spending and receipts as a percent of GDP (which I myself do not think is a particularly useful metric, but it gets used all the time), the spending vs receipts picture is stark. It turns out that current receipts (2011) are about 2.3% behind the yearly average since the end of World War II, 15.4% vs an average of 17.72%. But 2011 spending was 4.3% higher than the average, 24.1% vs an average of 19.79%.”
What this really debunks is any kind of claim that the United States is somehow practicing “austerity”. Annual budget deficits equal to about 8.7% of GDP are stimulus straight out of the Keynesian handbook.
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Good, detailed editorial in the WSJ today:
“June 11, 2012, 7:17 p.m. ET
ObamaCare’s Secret History
How a Pfizer CEO and Big Pharma colluded with the White House at the public’s expense.”
…
‘The lesson for Republicans if they do end up running the country next year is that their job is to restore the free and fair market that creates broad-based economic growth. The temptation will be to return for the sake of power to the methods of Tom DeLay and Jack Abramoff. If they do, voters will return the GOP to private life as surely as they did the Democrats in 2010.
The warning to business is also fundamental. Crony capitalism undermines public trust in capitalism itself and risks blowback that erodes the free market that private companies need to prosper and that underlies the productivity and competitiveness of the U.S. economy. The political benefits of cronyism are inherently temporary, but the damage it does is far more lasting.”
http://online.wsj.com/article/SB10001424052702303830204577446470015843822.html?mod=WSJ_Opinion_LEADTop
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Scott
The chart, I believe, represents CBO’s projections made in 2000, not actual tax receipts.
Actually no, I think you’re wrong about that. The chart shows what actually happened not what was projected and was updated on June 7 to reflect 2011 numbers. The chart is updated every year with real numbers not projections and the baseline is changed going forward I believe. So, I still don’t know why their numbers are so different from the ones you’re quoting.
In January 2001, CBO’s baseline projections showed a cumulative surplus of $5.6 trillion for the 2002–2011 period. The actual results have differed from those projections because of subsequent policy changes, economic developments that differed from CBO’s forecast, and other factors. As a result, the federal government ran deficits from 2002 through 2011. The cumulative deficit over the 10-year period amounted to $6.1 trillion—a swing of $11.7 trillion from the January 2001 projections.
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lms:
The chart shows what actually happened not what was projected and was updated on June 7 to reflect 2011 numbers.
The first line on the chart represents the “baseline projection” made in January 2001. This is a projection, not a realized number.
The second section, “Changes to revenue projections”, represents the difference between the projections and what was actually realized. Therefore the baseline projection minus the “changes” should equal the numbers I quoted, except for the fact that my numbers were in constant, 2005 dollars and it seems like the CBO chart is in actual dollars. If you go to my link and look at the first column which is “current dollars” (ie not constant), you will see that they match the difference between the projection and the changes in the CBO link.
I’m not sure what your $2 trillion number is, but according to the CBO’s original projections, receipts in 2011 were projected to be $3.447 trillion, but were actually $1.144 trillion lower, at $2.303 trillion. In constant, 2005 dollars, this equals $1.999 trillion which is only $310 billion lower than tax receipts in 2000, again in constant, 2005 dollars.
In other words, in constant dollars, actual tax receipts dropped by about $300 billion between 2000 and 2011.
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Scott
I looked at the chart again and think I understand what you mean, maybe, sort of. Are you saying that the 2001 projections were based on faulty assumptions and the lost revenue is not an actual number but only the difference between what was projected and what was real? So the $2T lost was only because the projected revenue was too high to begin with and didn’t have anything to do with the tax cuts?
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lms:
So the $2T lost was only because the projected revenue was too high to begin with and didn’t have anything to do with the tax cuts?
Again, I’m not sure how you are calculating the $2 trillion number, and I don’t think that “lost” is an accurate characterization. If I project that my salary will increase by 10% a year for the next 10 years, but in reality it ends up staying flat for 10 years, I wouldn’t say that I have “lost” money.
But yes, the projections were obviously wrong, ie too high. Whether or how much tax policy had to do with the faulty projections is neither here nor there from my point of view.
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To look at those historical numbers as percent of GDP another way, in 2000 income was 20.6% and spending was 18.2% (a surplus which was the legacy of Clinton). A decade later, income was at 15.1% and spending at 24.1%. In that time revenue fell 5.5% of GDP and spending went up 5.9% of GDP. So we have both a spending and a revenue problem. Spending as a percent of GDP hasn’t been below 16% since 1951 so there is no realistic way to ever get to a balanced budget under the current tax structure without a massive gutting of defense spending, entitlement programs or both.
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yello:
So we have both a spending and a revenue problem.
Only if you look at 2000 as normative. I’m not sure what justification you would have for that.
Besides which, as I mentioned up front, I don’t think it makes sense to measure either spending or revenues as a percent of GDP. The costs of running necessary government services is largely unrelated to GDP, and needed revenues are a function of cost, not GDP.
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Scott
I was just looking at the changes to revenue across the first column below the projections to make the point I was making. I was only looking at the subtotal of legislative and not economic or technical. It seems reasonable to me still to look at those numbers and see how legislative tax policy, ie cuts, has added to the deficit.
Whether or how much tax policy had to do with the faulty projections is neither here nor there from my point of view.
Okay but aren’t projections always off and just a way of defining the possible effects of any given legislative policy with other facts assumed as being constant. We know that’s never the case but now we can look back and perhaps see where mistakes were made. That’s my impression anyway of the way to read these reports.
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lms:
Okay but aren’t projections always off…
I imagine so.
We know that’s never the case but now we can look back and perhaps see where mistakes were made.
We can certainly see (to some limited extent anyway) what the mistakes were in terms of projecting the future. But I don’t see how the reports tell us what mistakes were made in terms of policy, and unfortunately that is how Bartlett is trying to use the report.
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LMS, we can certainly get rough approximations from holding “all else constant”.
And as YJKT says, we have lowered taxes and raised spending since we last had a theoretically balanced budget. And as JNC pointed out, this model does not bespeak austerity.
I will add another pair of observations. 1] “WARS”. 2] “Runaway health care spending.”
We already allowed for the housing bubble bursting.
Neither Keynesian Ds [more spending for the sake of spending] nor Keynesian Rs [less tax because less tax is always better] make much sense.
Neither all Ds in power nor all Rs in power will help the economy in the long run. We needed mixed government that leaned toward cost control, measures of efficacy,and tax reform that raised more revenue; that mounted a concerted attack on public health care costs, and restrained itself to a less militarily adventurous FP.
This will happen voluntarily or at some point painfully. I no longer hope for voluntary. I hold Rs more to blame in the current environment than Ds but I have no illusions that Ds will “do the right thing”. They do seem more willing to compromise when the Rs have the upper hand than the Rs do when the Ds have the upper hand.
But sometimes the compromises are all wrong! A D pundit today said BHO should trade an extension of the GWB tax cuts for an R pledge for more aid to the states, presumably on the medicaid hole that is blowing wide open. A trade-off where Rs get less taxes and Ds get more spending?
Jesus H. Christ.
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we’re up today. Why? who knows!
“US Deficit More Than Doubles to $125 Billion”
That must be it.
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The May deficit, which was close to analyst forecasts, followed a rare month of surplus in April that was due to higher budget receipts during tax season but also other temporary factors.
So far this fiscal year, the budget deficit stands at $844.5 billion, narrower than at the same time a year ago.”
Under the government’s accounting system, October is the opening month of fiscal 2012. During fiscal 2011 which ended September 30, the budget deficit totaled $1.296 trillion.”
Where is our modern day Dirksen to say “a trillion here a trillion there and pretty soon it adds up to real money”
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Mark, I haven’t heard anyone credible make the claim that the Feds have crammed austerity down our throats, but I think the case could be made that some states have forced austerity measures on their citizens by their inability to balance their budgets. I think the Feds could have, although it’s probably too late now, thrown a little more stimulus the way of the states. Wasn’t it Susan Collins who really nixed that in the stimulus debate? I realize things are worse in CA and a few other states precisely because of being ground zero for housing and construction but some of the cuts have been really debilitating and are certainly not fostering growth.
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LMS, don’t you think that Cal could resolve its problems, if it would? If Brown cannot get it done, however, probably no one can. I think he could do it with a modestly cooperative Lege, but I am reading that Rs oppose and Ds oppose.
Look – Cal is a rich state. It would have the world’s sixth largest stand alone economy. TX would be #9. These two states must usually handle their own problems because they are so much stronger than the economies of the rest of the states. If we were Europe, CA would be Germany and TX would be FR. NY would be the UK, obviously.
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Scott
But I don’t see how the reports tell us what mistakes were made in terms of policy, and unfortunately that is how Bartlett is trying to use the report.
I’m going with Bartlett on this one.
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We needed mixed government that leaned toward cost control, measures of efficacy,and tax reform that raised more revenue; that mounted a concerted attack on public health care costs, and restrained itself to a less militarily adventurous FP.
There you go talking moderation and reason again.
The costs of running necessary government services is largely unrelated to GDP, and needed revenues are a function of cost, not GDP.
Per capita in constant dollars would be a better viewpoint (and potentially more alarming) but you work with the tools you are given.
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According to Mark Fisher of MBF, oil doesn’t belong at $83 and won’t remain at this level for long. “Either it goes back to $100 or it drops to $65 – but we’re not staying here,” he says.
“I think ultimately we’re going up,” Fisher adds, “that’s my gut, but when I get a gut feeling I’m either really right or really wrong.”
When nat gas was at $2 I told you we couldn’t stay there. Fisher is a really smart and rich guy, and I agree with him.
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Brown’s not Gov. Moonbeam anymore, anyway. He’s trying, but not finding much cooperation in typical CA fashion. I was only talking about the early days of the recession and during the stimulus debate when a little more help to the states would have prevented some of the worst of the cuts and cities being burned by the state. As I said it’s too late now and many of the states, especially swing states, are improving. Could you imagine the uproar for a bailout for CA? Haaaahaaaaa
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Thanks for the good discussion everyone, I’m happy to be able to participate again. I do need to find something to talk about besides econ though………………yikes.
Mark, we’re supposed to have our book review this week and I haven’t read the book yet. Do the rest of you want to go ahead without me or should we reschedule? I won’t be upset it you go on without me since I’m the flaky one.
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I will be in Houston over the weekend so I would just as soon postpone for personal reasons. LMS, my guess is that very few have read it. I’ll ask bb, Brian, and Mike if you ask the Plum Girls. And anyone else here who catches this, please feel free to chime in.
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OT: Lest you think he’s all bad
“Wis. governor angers Woman’s Christian Temperance Union by serving beer at lawmakers’ cookout
By Associated Press, Updated: Tuesday, June 12, 4:49 PM
MADISON, Wis. — Wisconsin Gov. Scott Walker can’t avoid union troubles, even when he’s trying to be bipartisan.
Walker invited state lawmakers to a cookout at the governor’s mansion after winning a recall election last week that was spurred by anger over a law he pushed through the Legislature effectively eliminating most public workers’ union rights.
Now, he’s angered the Woman’s Christian Temperance Union with his plan to serve beer at the Tuesday cookout designed to help bring Republicans and Democrats together. The WCTU successfully lobbied for Prohibition, which made selling alcohol illegal from about 1920 to the early 1930s, and its 5,000 members continue to spread its anti-drinking message nationwide.”
http://www.washingtonpost.com/national/wis-governor-angers-womens-christian-temperance-union-by-serving-beer-at-lawmakers-cookout/2012/06/12/gJQANJulXV_story.html?tid=pm_national_pop
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Ezra Klein makes a good point about past recessions, Republicans and public sector state workers, with a handy chart.
In the graph atop this post, I ran the numbers on total government employment after the 1981, 1990, 2001 and 2008 recessions. I made government employment on the eve of the recession equal to “1,” so what you’re seeing is total change in the ensuing 54 months, which is how much time has elapsed since the start of this recession.
As you can see, government employment tends to rise during recessions, helping to cushion their impact. But with the exception of a spike when we hired temporary workers for the decennial census, it’s fallen sharply during this recession.
Note that a Republican was president after the 1981, 1990 and 2000 recessions. Public-sector austerity looks a lot better to conservatives when they’re out of power than when they’re in it.
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lms:
Ezra Klein makes a good point
Not really. The 1980 recession lasted 16 months, and both the 1990 and 2000 recessions lasted 8 months, so why Klein thinks the size of government employment more than 4 years after the beginning of each is indicative of how R’s, or anyone, responded to the recessions is a bit of a mystery.
BTW, Klein’s claim that “As you can see, government employment tends to rise during recessions, helping to cushion their impact,” is not at all true. According to his graph, during the 1990 recession government employment was largely flat, and it actually fell during the 1980 recession. It did rise both during and after the 2000 recession as well as, oddly enough given his not-so-good point, during the 2007-2009 recession.
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Scott
I can see the charts myself. All you’re really saying is that the other recessions didn’t last as long. It does look however as though public sector workers came out better overall. How long has this one been over now, over two years right, and we’re still shedding jobs. I think that’s all they’re calling attention to. They’re saying it’s interesting that one of the differences is we have a Democratic President which may or may not be causative I suppose. I just thought it was an interesting observation.
Of course I never believed the darn thing was over in 2009 to start with so I’m not sure how that would factor in.
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lms:
I can see the charts myself.
Then I assume you can see that what Ezra says is not true.
All you’re really saying is that the other recessions didn’t last as long.
No, what I am saying is that it makes no sense to make claims about how someone responded during a recession based on government employment statistics 3 years after the recession ended.
How long has this one been over now, over two years right, and we’re still shedding jobs.
No, we are adding jobs and have been for almost 3 years, despite the fact that the number of government jobs has shrunk.
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Latest from Carville & Greenberg is worth a read:
“Shifting the Economic Narrative
June 11, 2012”
http://www.democracycorps.com/focus/2012/06/shifting-the-economic-narrative/
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jnc, how do you have time to find all these good links?
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Most of them I track down from articles on the Washington Post and just trace to the source.
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Here’s another:
“Leaks Could Sink Obama White House
Republicans call for an independent counsel, while the FBI and two federal prosecutors are already on the case. Clapper was furious — and now the White House is “very nervous.”
Michael Hastings BuzzFeed Staff
Posted Jun 12, 2012 7:00pm EDT
By opening an investigation into the leaks of classified information, the Obama White House appears to be entering the kind of perilous Fill-In-The-Blank-Gate terrain that has eventually engulfed most administrations in the modern era.
The pattern: an initial investigation launched to relieve mounting political pressure snowballs into a much larger scandal, leaving a trail of broken careers in its wake.
And the beginnings of that pattern are in place: Attorney General Eric Holder Friday appointed two federal prosecutors to oversee multiple FBI investigations into leaks involving stories in recently published books and articles in the New York Times, AP, and Newsweek. The move deflected, but didn’t end, a rising, bipartisan tide of Congressional criticism of the leaks. Republican senators Tuesday called for a vote in Congress to recommend that an independent counsel look into national security secrets that have appeared in the media.
“It’s going to be trouble, “ says Steve Clemons, an influential policy analyst who has close ties to the administration. “It’s going to be like the search for who leaked Valerie Plame’s name. If the truth does come out, I suspect it will be a major player. Of course the White House is very nervous.””
http://www.buzzfeed.com/mhastings/could-leaks-sink-the-obama-white-house
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Scott
No, we are adding jobs and have been for almost 3 years, despite the fact that the number of government jobs has shrunk.
We were talking about public sector jobs so I assumed you would know that was what I meant. .
It seems to me also that the effects of a recession linger and ripple through the economy for several years. As I said, this one hardly seems over to some of us so I don’t think it’s unreasonable to track employment or other numbers for three years or more. Considering that the Feds are still playing with interest rates etc. and that there are still people on unemployment extensions and many states are still having trouble balancing their budgets, I think that’s a reasonable comparison between recessions.
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lms:
We were talking about public sector jobs so I assumed you would know that was what I meant.
Well, you said “How long has this one been over now, over two years right, and we’re still shedding jobs.” If you are just talking about public sector jobs, I don’t understand the connection. I don’t see why we should lament that we are “still shredding” public sector jobs if the economy is replacing them (and then some) with private sector jobs, unless you think public sector employment is desirable just for its own sake.
It seems to me also that the effects of a recession linger and ripple through the economy for several years.
The most recent one is certainly lingering longer than most.
Considering that the Feds are still playing with interest rates etc. and that there are still people on unemployment extensions and many states are still having trouble balancing their budgets, I think that’s a reasonable comparison between recessions.
Perhaps, but the absence of a robust recovery in our most recent recession makes Klein’s comparison to other periods in which strong recoveries had already taken place even less sensible. For example, Klein’s graph shows that government employment didn’t even reach its pre-recession level until roughly 3 years after the 1981 recession began, at which point the economy was well into a very strong recovery. He ignores the obvious implication that it was the strong recovery itself, and not Republican attitudes towards public sector austerity during the recession, that resulted in the eventual gains in public sector employment.
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Scott
I think they both more or less depicted the 1981 recession as not quite fitting their thesis.
Going back as long as the data have been collected (1955), with the one exception of the 1981 recession, local government employment continued to grow almost every month regardless of what the economy threw at it. But since the latest recession began, local government employment has fallen by 3 percent, and is still falling. In the equivalent period following the 1990 and 2001 recessions, local government employment grew 7.7 and 5.2 percent. Even following the 1981 recession, by this stage local government employment was up by 1.4 percent…
If you are just talking about public sector jobs, I don’t understand the connection. I don’t see why we should lament that we are “still shredding” public sector jobs if the economy is replacing them (and then some) with private sector jobs, unless you think public sector employment is desirable just for its own sake.
No, I don’t think public sector employment is desirable just for its own sake. My original reason for linking the Klein piece was simply to highlight that public sector workers have taken an especially hard hit during this recession which may cause a ripple effect throughout some of the states regarding cuts in services and keeping these states from bouncing back as quickly. I think the point was that generally, keeping public employees employed during a recession acts as a stimulus throughout the economy, even during a Republican Presidential term.
According to your interpretation of the timeline that’s a bogus claim, but I see relevance here in CA anyway.
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lms:
According to your interpretation of the timeline that’s a bogus claim
I don’t know whether or not the claim is bogus, but the graph Klein presents doesn’t do anything to support the claim.
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